Lessons from northern Italy

My e-mail pen pal Bill Harvey sent me a link to an article in YES! magazine about the Emilia Romagna region in northern Italy, where two-thirds of its 4.5 million people participate in co-operative businesses.

There are worker-owned cooperatives, consumer-owned co-operatives, and social service co-operatives, in which people band together to provide day care, care for senior citizens and other services that the Italian government can’t do satisfactorily.

Vera Zarnagni, professor of economic history at the University of Bologna, said co-operative enterprise is part of an economic tradition going back to the 1850s. It’s an illustration of a contention by the American thinker Murray Bookchin, that there are other ways the world’s economy could have developed besides the way it did.

Even though a majority of the region’s people are co-op members, many of them also work for profit-seeking corporations. Co-operative business activity accounts for about 30 percent of the economic output of the region.

Most of the co-ops in the region are small enterprises, linked together in a ecological network of relationships. What I’ve read about Italy indicates that this is true of Italian business as well. Italy has an unusually high proportion of small family-owned businesses, linked by personal relationships, and engaged in high-value work involving high standards of craftsmanship.

Italian law is friendly to co-operatives. Surpluses earned by co-operatives are exempt from corporate profits taxes, but they have to contribute 3 percent to one of two national co-operative development funds. They can choose between the one sponsored by the Communist Party and the one sponsored by the Catholic Church.

When workers are laid off, they have the option of pooling their unemployment compensation to start new co-operative businesses. And co-operatives are allowed to raise money by borrowing from their members.

Italy does not have a dynamic economy. Its rate of economic growth lags behind the European Union as a whole. But seen from afar, its co-operatives set an example of enterprises that are sustainable and humane.